28 July 2009

Disclosure of illness of company director

It is a hot question internationally. Should the director/top management and the company be obliged to disclose the ill health of such director/top management where the fate of the company is tied to the health of such senior director/executive? The topic has gained currency with the health of Steve Jobs - which investors tie to the fate of Apple Corp. Clearly there are two legal arguments at play. First, the interest of investors who want to know the health of the prima donna director/executive as their stock prices and the future of the company is dependent upon such health. The second and contrary interest is of the director/executive's privacy.

I believe, that you cannot have two standards - one for company with prima donna director/executives and another for companies which do not have such superstars at the helm. Given a single standard, I argue for the primacy of the privacy of the director/executive. See Harvey Pitt, former Chairman of the SEC and me on CNBC's "the Firm" discussing the issue tomorrow (29th July) 5.30 pm IST.

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